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eToro Puts a Price Tag of over $3.5 Billion to Potential IPO

source-logo  financemagnates.com 10 March 2024 16:56, UTC

Israel’s eToro is again considering going public with a valuation of more than $3.5 billion, the brokerage’s CEO, Yoni Assia, told the Financial Times. In its previous failed attempt to go public, eToro signed a $10.4 billion deal with a blank check company, showing a massive valuation cut by the brokerage.

The US over the UK for IPO

While the broker is primarily operating in the United Kingdom, its strategic consideration of the United States for public listing is driven by the deep liquidity in the market. However, the broker has not ruled out London as the potential market for its public listing.

Yoni Assia, the Founder and CEO of eToro.

“Retail investors in the UK and Germany want to trade US stocks,” Assia told the publication. “We see that UK clients might trade also UK shares, but very few of our global clients would trade UK shares. Something in the US market creates a pool of both deep liquidity and deep awareness for those assets that are trading in the US.”

Unlike the previous attempt, the broker now looks at an initial public offering (IPO). Despite Assia’s confirmation, the broker is yet to reveal any details.

A Strategic Time for the Public Listing

Headquartered in Israel, eToro has successfully expanded its operations into the European markets, generating 70 percent of its revenue from the continent. Founded in 2007, it initially made its name in the copy-trading space but has since diversified its offerings with stocks and cryptocurrencies.

The platform has about 3 million accounts and manages about $11.3 billion in customer assets.

eToro’s intention to go public was revealed in 2021 when the broker signed a deal with Betsy Cohen’s Special Purpose Acquisition Company. However, the deal fell apart in July 2022 as the two could not reach a closure agreement despite pushing the deadline multiple times.

After the failed reverse merger attempt to go public, eToro raised $250 million from investors, including SoftBank and Ion Group, at a $3.5 billion valuation.

Assia’s plan to take the company public is now fueled by the present market conditions at their peak. He is following the playbook of Robinhood that rode the tech frenzy in 2021 for a New York listing. However, the two companies have different priorities despite offering trading services.

“Unlike Robinhood, all their customers are US-based [and] they did a US IPO, our customers are mostly European, UK, Asian,” Assia said. “To give access to US IPOs in European markets is a very different infrastructure.”